The recent trip of the Commander-in-Chief of the Armed Forces and President of the Federal Republic of Nigeria, President Muhammadu Buhari has been condemned by various sections of the country. From the learned minds, opposition politicians to the ordinary citizen that can read a newspaper and can listen to the news on the radio. The criticisms about this latest trip to the Asian nation has been greeted with so much disgust and discontentment that even movie stars have also voiced their opinions.
The issue everyone has been pointing to as the bone of contention is this: How would the Federal Government be going to China to obtain a loan of $2 billion when the All Progressives Congress (APC)-led government upon its inception began the anti-corruption crusade which hunted down a number of corrupt politicians, civil and public servants and has allegedly ‘recovered’ millions of dollars?
But while that question may be answered by ‘Baba’ himself when he returns, Ugonna Emechebe, a Facebook user, who is also a political scientist and social analyst has taken the pains to throw insight to the possible reason for the President’s current voyage which is worth reading. He says the aim of this ‘travel’ is to make the Chinese Yuan the new ‘dollar’ for Nigeria and that Mr. President deserves credit for this current move.
Read his post below:
I am a minister of the gospel, social analyst, political scientist, and a concerned citizen of Nigeria. I am not a card carrying member of any political party, and I must make it clear that I support Nigeria and anything that will make this country retake its place on the pedestal from which years of incompetence, impunity, malfeasance, nepotism, ethnic and tribal hatred, and the culture of mediocrity removed it.
There are two extremes I find absolutely preposterous. On one hand are those that never see any good in what this present administration does and would go as far as wishing the whole country collapses just to prove their point that Buhari is a bad president. I find that absolutely stupid and unreasonable.
On the other hand there are those that either do not have the commonsense to realise that a democracy allows for constructive criticism and that this is meant to keep government on its toes, or think that being implacably docile and accepting of every single utterance from the seat of government is an act of patriotism. Seeking patronage you may be, but being patriotic you are not.
I find both extremes immensely vacuous, and the fact that people that occupy them are in no short supply even more so. We have one country, and it is our collective responsibility to ensure it works. Having said that…
President Muhammadu Buhari and Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele are said to have moved closer to actualizing their promise to strengthen the naira against the United States dollar by signing a landmark currency deal with the Industrial and Commercial Bank of China Ltd on Tuesday in Beijing, China.
The agreement will allow Nigerian traders and businesses, which import mainly from China conclude their transactions in the Chinese currency, the Renminbi (Yuan), instead of the dollar.
The new agreement would see Nigeria-China trades, which accounts for over 70 percent of imports into Nigeria, concluded in the Yuan.
Until now over 90 percent of international trades between Nigeria and the world is done in dollars, and in the process putting so much pressure on the naira. Nigeria imports almost all it needs from the West, Middle East and Asia.
The CBN is expected to diversify a huge chunk of Nigeria’s foreign reserve from the dollars to the Yuan to perfect the agreement.
“It means that the renminbi (Yuan) is free to flow among different banks in Nigeria, and the renminbi has been included in the foreign exchange reserves of Nigeria,” Lin Songtian, director general of the African affairs department of China’s foreign ministry, told reporters in Beijing a few minutes after the agreement was signed between the Governors of the nations’ reserve banks in the presence of President Buhari and President Xi Jingping of China, who is hosting Buhari and top Nigerian officials to a state visit.
Lin said a framework on currency swaps has been agreed with Nigeria, making it easier to settle trade deals in Yuan. China has signed currency swap deals with countries ranging from Kazakhstan to Argentina as it promotes wider use of its Yuan.
The deal is said to ensure Nigeria would become the clearinghouse for Yuan denominated transactions for the whole of Africa.
Beijing also signed agreements to develop infrastructure in Nigeria, part of a drive to deepen its ties with Africa. It has offered Nigeria a loan worth $6 billion to fund infrastructure projects.
China’s official Xinhua news agency cited President Xi as telling Buhari that there was huge potential for economic cooperation, naming oil refining and mining.
Nigeria is also considering issuing Panda bonds (mainly Yuan denominated) as against euro bonds because they are cheaper.
I am not an economist but I can only assume that this will bring a huge amount of progress to the Nigerian economy.
When a considerable amount of import is done with the yuan the pressure on the available greenback in our reserves will be eased.
This has got to be a good thing, right?
If that is the case then credit must go where it is due.
Well done PMB.
What do you think about this? Comment below…